I'm the Detroit bureau chief for Forbes, which means I spend most of my time covering the automotive industry. But I also keep an eye on the rest of America's heartland—where stuff is manufactured and grown. I've been on the auto beat for more than 20 years at Forbes, Business Week and the Detroit Free Press. At the Boston Globe, I rode the tech bubble for a while, but I found there's nothing quite as fun as the auto beat. Whether you drive a car or not, everyone has an opinion about cars or car companies. What's yours?

10 Reasons GM's Profit Is About To Explode

General Motors has pocketed $5 billion in net profit so far this year, $1 billion more than crosstown rival Ford Motor, no surprise since GM is a larger company. But in North America, where the two carmakers compete most fiercely, Ford is way ahead.

Ford earned almost $6.5 billion in pre-tax profit selling vehicles in its home market through the first nine months of 2012. Its 11.2% operating margin on $57.8 billion of revenues (not counting Ford Motor Credit) was the company’s best in the region since 2000. Just a few years back, GM would have been thrilled with its own 7.8% pre-tax margin in North America. But after emerging from bankruptcy in 2009 with a clean balance sheet, lower labor costs and fewer obligations, it should be doing better. The earnings gap with Ford has become a glaring issue for GM and its investors.

“We track where we are — how we are performing vs. Ford very closely,” Chuck Stevens, GM’s chief financial officer for the region, told analysts during an Oct. 31 conference call. “We’ve got a clear understanding of the gap. We know what we have to do to close it.”

Chief Executive Dan Akerson said he’s confident GM can improve its margins by the middle of the decade. “It will be a function of volume growth, even stronger brands, less complexity, and lower…costs, all of which is built into our business plan.”

But a business plan is just that: a plan. GM has disappointed so many times before. The biggest risk is execution. Akerson, a former private-equity manager whose background is in telecommunications, is new to the auto industry. He’s leading a young team of executives and trying to kick-start cultural change in a 100-year-old company where change is hard to swallow. A former U.S. Naval officer, Akerson rules with an iron fist and demands accountability. But at times, he has appeared to be floundering.

Still, let’s give credit where credit is due. GM has started to get its act together in many ways. Here are 10 reasons GM’s profits should start to kick into high gear in 2013 and beyond.

1 – The next two years are huge for GM showrooms. Every carmaker tries to balance the cadence of its new vehicle introductions to ensure there is always something new on display, but some years inevitably end up being better than others. GM’s financial troubles in 2009 meant it had to suspend or delay some products. Now the engineering pipeline is full again, and new vehicles are coming out in record numbers. GM says it will replace 80 percent of its lineup in the next two years, including its next-generation pickups and large crossovers which debut in mid-2013. “We are going to go from having the oldest portfolio in North America to the freshest portfolio,” said Stevens. New products typically command higher prices, which roll right to the bottom line, and trucks, in particular, carry hefty profit margins. Citi Research says GM ought to realize $1 billion in extra profit in 2013 because of its stronger product offerings.

2 – GM has stopped giving away the store. The company has shown uncharacteristic pricing discipline over the past year, especially in recent months, by resisting the temptation to match rivals’ discounts. In fact, GM’s incentive spending has been falling through the year. In November, it spent about $2,800 per vehicle on incentives — everything from cash rebates, lease promotions, cheap loans and dealer incentives. That was equal to 8.8% of GM’s average vehicle transaction price (ATP), below the industry average of 9.5% of ATP, according to J.D. Power and Associates’ PIN report.

3 – GM’s size is becoming an asset. For years, GM’s sprawling, decentralized operations were an excuse for its global inefficiency. Now it’s turning that around, leveraging its size by building more vehicles on shared global platforms, which reduces engineering costs. Ford is doing the same thing, but is about two years ahead, according to GM executives. GM’s goal is for about 80 percent of the vehicles it sells to be based on one of a handful of global architectures, twice today’s level.

4 – GM is hacking waste. Bankruptcy cleaned up GM’s balance sheet, but it did nothing about the wasteful practices inside the company. Akerson is relentless about making GM a simpler company, which in turn, he argues, will lower its costs. GM cut an entire layer of management out of its product development unit, for instance, giving chief engineers more responsibility for product cost, quality and competitiveness. GM is also rebuilding its information technology infrastructure, bringing more tech expertise in-house. “Benchmarking proved what we knew intuitively — GM’s outsourced IT model is expensive, inefficient, and outmoded,” Akerson told analysts. “Now all of that is changing and it’s going to help us manage the business with even more speed and precision.”

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This article overlooks the passenger car market in the U.S. and Europe: in both places GM cars lack the engineering expertise and features of German and Japanese competitors. Few cars have rear wheel drive, the handling and steering of competitors. GM and Ford survive domestically with their truck lines.

OMG are the Government Motors managers actually Republicans ? Retiring pension dept is not an approved Obama option !

Wish I had tax loss carry forwards for my business. How about some of the cash goes to buying back the stock at the price paid ? Might just be enough to avoid the cliff. It was a loan technically so current stock price should not be considered. Just cash on hand to settle outstanding debt.

1) They make crappy cars. 2) They have lazy, overpaid union workers. 3) No one wants to buy stock for fear the government will dump their shares. 4) They make crappy cars. 5) For decades they continued to make oversized cars, well behind the curve in regards to technology. And even after the bailout, they continue like nothing happened. 6) They make crappy cars!!! 7) All of this is true, which is why they had to get bailed out by taxpayers. 8) After the bailout, they continue to pay their union workers ridiculous wages, pensions, etc averaging $70 per hour. 9) How about paying people what they deserve?! Which is zero, since they already went bankrupt. Buy your own health insurance and life insurance! Why do taxpayers have to foot the bill. Should we pay for your cable TV and beer too??? 10) Oh yeah… they make crappy cars.

GM makes the best cars of any of the domestic automakers no matter how bad you don’t want to believe it…

“Consumer Reports has released its top 10 list of predicted most reliable American cars from the 2012 Annual Auto Survey. The researchers chewed through their data to come up with the vehicles in each segment that garnered a reliability rating of “average” or better, while also scoring high enough in Consumer Reports testing to earn a “recommended” rating. Chevrolet took home five of the slots, with General Motors products soaking up two more for good measure. That left Ford and Chrysler to scrap over the remaining two spots.”